Planet Organic has put administrators on standby as as it rushes to raise additional funds to secure its future.
The organic supermarket chain has filed a notice of intention to appoint insolvency practitioners amid rescue talks, as city sources said it needs a multimillion-pound cash injection next month to survive, Sky News reported.
Suppliers have also said that orders have been temporarily halted, with the business overstocked and looking to closely manage its cashflow while advisors at Interpath look to close a deal, The Grocer reported.
As a result, some suppliers have been made aware that Planet Organic would not be taking any new orders for the next ten days.
This comes as Waitrose pulled out of talks to acquire a stake in the supermarket chain earlier this week.
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The agreement, if it had gone ahead, would have seen the upmarket retailer inject millions of pounds into Planet Organic in exchange for a significant shareholding, retail industry sources said.
In a message to staff seen by Sky News, Planet Organic CEO George Dymond said: “Over the past 12 months, we have been extremely busy fundraising in order to raise money to support the business and unlock our store expansion plan.
“Despite our wonderful stores being largely profitable, a herculean effort by the buying team to improve our margins and a huge improvement in the costs of running both stores and the e-commerce business, it is a fact that the business is still loss-making.”
He said that Planet Organic has “taken every possible action” to improve its position, “including additional investment from our existing shareholders.”
However he admitted that the supermarket has “so far been unsuccessful in raising sufficient funds needed to support the business and the growth plan.”
“In the meantime, however, we have had to take legal steps to protect the position of the business to afford us the time to be able to find a solution to the challenging situation we face, including filing at court a notice of intention to appoint administrators which is the first step in a potential administration process.”
